Strategy 05 · Spot Trading
OTC Block Execution
Size that would move a book, traded off it.
Some orders are too large for any public order book, or would signal intent the book does not want to reveal. These are executed bilaterally with principal liquidity providers, desks that quote a firm price for the whole size and take the position onto their own book. The trade is private, the price is agreed before it is done, and the risk moves to settlement.
Request for quote
Wesvel requests a firm two-way price for a defined size from several providers at once, compares them to each other and to the cost of executing the same size across public venues, and deals on the best. Providers are competing for the flow, which keeps quotes tight; providers that consistently quote wide or decline in stress drop out of the rotation.
Settlement
The risk in a bilateral trade is that one side delivers and the other does not. Wesvel settles on a delivery-versus-payment basis wherever the counterparty supports it, through a settlement network, a triparty agent or an atomic on-chain swap, so that neither side’s assets move unless both do. Where that is not available, exposure between trade and settlement is treated as unsecured credit to the counterparty and sized within its limit.
Counterparty diligence
Every provider in the rotation has been reviewed: regulatory status, balance sheet and financials, custody and segregation arrangements, settlement capabilities, and behavior in prior stress periods. Providers are counterparties in the fullest sense and carry limits like any exchange. Settled assets are never left at a desk.
Practice
How Wesvel approaches it
- 01Quotes are requested from multiple providers simultaneously and compared to public-venue execution cost before dealing.
- 02Settlement is delivery-versus-payment by default; pre-settlement exposure elsewhere is treated as credit and sized within the counterparty’s limit.
- 03Providers pass the same counterparty diligence as exchanges and are reviewed on a schedule.
- 04Assets are moved to segregated custody on settlement; no balances are maintained at a desk.
More in Spot Trading
- Cross-Venue ArbitrageBuying and selling the same asset on two venues at once, and why pre-positioned inventory is what makes it work.
- Smart Order RoutingSplitting large orders across venues and time against live depth, and reviewing every execution against arrival price.
- Decentralized VenuesTrading on automated market makers and on-chain order books, gas, MEV, finality and contract risk in place of exchange risk.
- Inventory and SettlementManaging working balances across venues, sweeping to custody, and settling fiat and stablecoin legs through regulated partners.